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Chapter 01
Introduction to the Field
True / False Questions
1. Efficiency means doing the right things to create the most value for the company.
FALSE
Level: Easy
2. Effectiveness means doing the right things to create the most value for the company.
TRUE
Level: Easy
3. A doctor completes a surgical procedure on a patient without error. The patient dies anyway.
In operations management terms, we could refer to this doctor as being efficient but not
effective.
TRUE
Level: Medium
4. A worker can be efficient without being effective.
TRUE
Level: Medium
5. Trying to maximize effectiveness and efficiency at the same time can create conflict.
TRUE
Level: Easy
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6. Maximizing both effectiveness and efficiency at the same time always creates the most value
for the organization.
FALSE
Level: Medium
7. A transformation process uses resources to convert inputs into some desired output.
TRUE
Level: Easy
8. Strategic operations and supply management issues tend to be primarily directed at planning
how to efficiently schedule material and labor.
FALSE
Level: Medium
9. A business education is complete with an understanding of modern approaches to managing
operations.
FALSE
Level: Medium
10. A traveler is an input to an airline's transformation system.
TRUE
Level: Easy
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11. A visit to a hair salon produces a tangible result—a new appearance for the customer.
Hence, the output of hair salons is a manufactured good, not a service.
TRUE
Level: Medium
12. Core goods are those tangible products that include a significant service component.
TRUE
Level: Easy
13. Core services are those products that integrate tangible goods into the service.
TRUE
Level: Medium
14. One of the precursors of operations management was the development of principles of
scientific management which happened during the 1930's.
FALSE
Level: Medium
15. Development of economic lot sizing models, including the EOQ model, occurred during the
1930's.
FALSE
Level: Medium
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16. In the late 1950's scholars began to deal specifically with operations management rather
than with industrial engineering and operations research.
TRUE
Level: Medium
17. Widespread use of computers in business led to development of methods like material
requirements planning (MRP) to rationalize manufacturing in the 1970s.
TRUE
Level: Medium
18. In 1913, Henry Ford developed an assembly line to make the Model-T automobile.
TRUE
Level: Medium
19. Just-in-time manufacturing (JIT) is applicable only for small-scale manufacturing
operations and can be used to eliminate production defects.
FALSE
Level: Medium
20. JIT is an integrated set of activities designed to achieve high-volume production using
minimal inventories of parts that arrive at the workstation exactly when they are needed.
TRUE
Level: Easy
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21. JIT is designed to achieve high-volume production using a significant inventory of
component parts that minimizes the probability of running out of supplies.
FALSE
Level: Easy
22. The term "value" refers to the relationship between quality and the price paid by the
consumer.
TRUE
Level: Easy
23. A current issue facing operations and supply managers is coordinating the relationships
between mutually supportive but separate organizations.
TRUE
Level: Easy
24. One of the current issues of operations and supply management is optimizing global
supplier, production and distribution networks.
TRUE
Level: Easy
25. One of the current issues of operations and supply management is decreasing
"commoditization" of suppliers.
FALSE
Level: Easy
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26. One of the current issues of operations and supply management is increased co-production
of goods and services.
TRUE
Level: Easy
27. Making resource utilization decisions must capture the direct costs of staffing and need not
consider the implicit costs of lost customers.
FALSE
Level: Easy
28. Managing global supplier, production and distribution networks is easy with the
implementation of global enterprise resource planning systems.
FALSE
Level: Medium
29. Really successful firms have an ambiguous idea of how they intend to make money.
FALSE
Level: Medium
30. One of the challenges facing operations and supply management is distributing products to
global markets.
TRUE
Level: Easy
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31. ISO 9000 certification standards play a minor role in setting quality standards for global
manufacturers but a major role in setting quality standards in the European Union.
FALSE
Level: Medium
32. All European companies require that their vendors meet ISO 9000 standards as a condition
for obtaining contracts.
FALSE
Level: Easy
33. Deciding how much inventory to purchase is a fundamental topic of operations
management.
TRUE
Level: Easy
34. Because the text states that "at the most fundamental level, operations and supply
management is about getting work done quickly, efficiently, without error and at low cost"
there is little in the field of operations management that relates to overall corporate strategy.
FALSE
Level: Medium
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Multiple Choice Questions
35. A reason for studying operations and supply management (OSM) is which of the
following?
A. OSM is essential for understanding organizational behavior
B. Most business graduates do OSM work regardless of their job title
C. The concepts and tools of OSM are used in managing other business functions
D. OSM is a required course in all business degree programs
E. OSM is the most rigorous business discipline
Level: Easy
36. Operations and supply management does not involve which of the following?
A. Using operations research/management science decision-making tools
B. Industrial engineering issues
C. Line management responsibilities
D. Improving operating systems
E. Portfolio management
Level: Easy
37. In the transformation process of a hospital, a patient is considered a primary input. A
primary transformation function of the same system is which of the following?
A. Healthy individuals
B. Health care
C. Well-prepared food
D. Storage and redistribution
E. Allocation of beds
Level: Medium
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38. In viewing a department store as a transformation process, shoppers are considered a
primary input into the process. A primary transformation function of the same system is which
of the following?
A. Stock pickers
B. Well-prepared food
C. Storage bins
D. Storage and redistribution
E. Promoting products
Level: Medium
39. Which of the following is not a general category for categorizing transformation
processes?
A. Exchange, as in retailing
B. Physical, as in manufacturing
C. Insulational, as in inventory
D. Location, as in transportation
E. Storage, as in warehousing
Level: Easy
40. One of the characteristics that distinguish a manufactured product from a service product is
which of the following?
A. Customers are always directly involved in creating the output
B. Customers often directly interact with manufacturing workers
C. A manufactured product is a tangible, physical item
D. Customers can purchase the identical service product from a number of outlets
E. A service product is superficial
Level: Easy
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41. Which of the following product attributes is a value added service?
A. Excellent quality
B. Internet monitoring of orders
C. Lowest cost
D. Effectiveness
E. Speed
Level: Easy
42. In the history of operations management the development of economic lot sizing models,
including the EOQ model occurred in what decade?
A. 1910's
B. 1930's
C. 1940's
D. 1950-60's
E. 1970's
Level: Medium
43. In the history of operations management the use and development of the set of activities
referred to as business process reengineering occurred in what decade?
A. 1940's
B. 1950-60's
C. 1970's
D. 1980's
E. 1990's
Level: Medium
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44. In the history of operations management the use of the multidisciplinary team approach to
complex system problems using tools like linear programming first occurred during which
decade?
A. 1930's
B. 1940's
C. 1950-60's
D. 1970's
E. 1980's
Level: Medium
45. In the history of operations management the use of synchronous manufacturing occurred in
what decade?
A. 1930's
B. 1940's
C. 1950-60's
D. 1970's
E. 1980's
Level: Medium
46. In the history of operations management the use of continuous improvement and value
engineering started in what decade?
A. 1940's
B. 1950-60's
C. 1970's
D. 1980's
E. 1990's
Level: Medium
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47. In the manufacturing strategy paradigm developed in the 1970's, which of the following are
suggested?
A. Manufacturing can be a competitive weapon by excelling on all performance measures
B. Manufacturing should focus on a limited set of tasks
C. Management should create a highly flexible factory
D. Manufacturing facilities can achieve the lowest possible cost
E. Manufacturing management is best done by people with engineering degrees
Level: Medium
48. Which of the following gurus are credited with helping to develop total quality management
(TQM)?
A. F. W. Harris
B. Lillian Gilbreth
C. J. M. Juran
D. George B. Dantzig
E. F. Robert Jacobs
Level: Easy
49. Which of the following individuals are credited with helping to transplant Japanese
methods of total quality management to the United States?
A. Harris
B. Baldridge
C. Dodge
D. Deming
E. Wright
Level: Medium
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50. Which of the following are considered current issues in operations and supply
management?
A. Developing flexible supply-chains for merged operations
B. Managing the customer's experience during the service encounter
C. Decreasing "commoditization" of suppliers
D. Increasing operations' responsibility for profits
E. Increasing unionization of the work force
Level: Medium
51. A total systems approach to managing the flow of information, materials and services from
raw material suppliers to the end customer is called what?
A. Electronic commerce
B. Total quality productivity
C. Total service quality
D. Supply chain management
E. Business Process engineering
Level: Medium
52. Radical changes in operations and supply chain management are advocated by proponents
of which of the following?
A. Business process reengineering
B. Electronic commerce
C. Total quality management
D. Manufacturing strategy
E. Mergers and acquisitions
Level: Medium
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53. Why is operations not perceived as important?
A. Operations is less crucial to the success of modern businesses than other functions
B. Many senior executives began their careers in other functions and learned to take operations
for granted
C. Successful mergers or "deals" is where the action is these days and operations plays only a
minor role in their success
D. Operations and supply improvement projects are typically small, short-term and not
strategic
E. Operational coordination is best achieved by general management or the sales function
Level: Medium
Short Answer Questions
54. What is the process called that uses resources to convert inputs into some desired output?
Transformation process
Level: Easy
55. What are the six categories of transformation processes?
1. Physical
2. Location
3. Exchange
4. Storage
5. Physiological
6. Informational
Level: Medium
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56. What United States National Quality Award was started in 1987?
The Baldridge Award
Level: Easy
57. What did the International Organization for Standardization create that is relevant to
operations?
The ISO 9000 Certification Standards
Level: Easy
Essay Questions
58. Discuss the role of efficiency and effectiveness in the creation of value?
A successful response to this question requires a definition of "value" (a relationship between
"quality" or performance of a product and price) and discussion of the trade-off between
efficiency and effectiveness. Creating value means striking the most appropriate balance
between efficiency and effectiveness for the market need the product will satisfy. These
concepts are discussed in the text starting on page 6.
Level: Medium
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59. Describe some of the generic differences between the production of goods and services?
The primary distinction relates to the intangible nature of services and the physical tangibility
of goods. A successful answer may note that all products are a mixture of the tangible and the
intangible; however products that are considered to be services require a more intensive
customer interaction with the transformation process than do goods. This topic is discussed in
the text under the heading "Differences between goods and services" on page 10.
Level: Medium
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60. The text mentions a number of major challenges (listed below) to operations management
that are expected to develop in the near future. Select one of these and briefly discuss the nature
of the challenge?
A. Coordinate the relationships between mutually supportive but separate organizations
B. Optimizing global supplier, production and distribution networks
C. Increased co-production of goods and services
D. Managing the customer's touch points
E. Raising senior management awareness of operations as a competitive weapon
These concepts are discussed in the text under the heading "Current Issues in Operations
Management" on page 18.
Level: Medium
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